Stocks are closing lower on Wall Street ahead of the start of corporate earnings reporting season, which will provide insight into how high inflation and rising interest rates are affecting US companies. The S&P 500 fell 0.7% on Monday.
Nasdaq US bond trading closed down 1%, while the Dow fell 0.3%. A much-anticipated monthly report on consumer price inflation is coming Thursday, and the Federal Reserve will also release minutes of its latest policy meeting this week. That’s when the Fed raised another extra-large interest rate of three-quarters of a percentage point.
Stocks are trading lower on Wall Street in afternoon trading Monday as investors look forward to the latest round of corporate earnings reports and a busy week of inflation updates.
As of 3:35 p.m., the S&P 500 is down 0.5%. The Dow Jones Industrial Average was essentially flat after discounting amid smaller gains and losses, and the Nasdaq fell 0.8%. US bond trading was closed.
Major indices are coming off a volatile week where they posted gains on the back of an early two-day rally that saved stocks from several weak days.
Technology stocks had the biggest load on the market. Manufacturers of semiconductors and chip manufacturing equipment also faced heavy sales as the US government tightened port controls to obtain advanced computing chips, develop and maintain supercomputers, and limit China’s ability to manufacture advanced semiconductors. Gave. Nvidia fell 3.2%.
Energy stocks declined as US crude fell 1.6%. Occidental Petroleum dropped 5.6%.
Industrial companies and others considered less risky, such as home goods manufacturers, do better than the rest of the market.
Wall Street has been turbulent amid concerns about overheated inflation and the Federal Reserve’s plan to tame higher prices by raising interest rates. The goal is to slow economic growth and cool both borrowing and spending to bring inflation under control, but the plan risks sending the economy into recession.
Investors will likely get a more detailed picture of the Fed’s thinking on Wednesday when the central bank releases minutes from its latest policy meeting. That’s when the Fed raised another extra-large interest rate of three-quarters of a percentage point.
“Nobody is arguing about whether inflation is falling,” said David Kelly, chief global strategist at JPMorgan Funds. “The battle for inflation is being won and the problem is that the battle for recession can be lost unnecessarily.”
Wall Street will get important updates on inflation and more information on how it’s affecting retail sales.
The government will release its report on producer prices on Wednesday, which will provide details of inflation at the wholesale level for businesses. A closely watched report on consumer prices will be released on Thursday and a report on retail sales will be released on Friday.
The latest sales update could confirm that consumers are booming financially, or at least pulling back on spending. It could send signals to the Fed, Kelly said.
“I’m just hoping the Fed is watching these indicators,” he said. “It should tell them that they are much closer to both beating inflation and killing the economy than they think.”
A busy week of closely watched economic reports comes amid the start of the latest round of corporate earnings reports. Those reports, and statements from companies and corporate executives, can help provide a clearer picture of how higher prices are affecting revenue and profits and expectations for the rest of the year and even into 2023.
PepsiCo, Delta Air Lines and Walgreens are among the big companies earning this week. Several big banks, including JPMorgan Chase and Citigroup, will present their results on Friday.
Inflation and recession risks top the list for bigger concerns, but COVID-19 and the prospect of its worsening continue to slow economic growth in an already slowing down. Stocks in Hong Kong and Shanghai fell on news of more lockdowns in China due to rising COVID-19 cases. Markets in Tokyo were closed for the holiday.
Casino and resort operators operating in China slumped over concerns about the impact from more lockdowns. Wynn Resorts fell 11.8% and Las Vegas Sands slipped 7.2% for the biggest drop among S&P 500 companies
catch all business News, market news, today’s fresh news events and breaking news Updates on Live Mint. download mint news app To get daily market updates.